New entrant to push manufacturers

While the economic environment of falling prices and oversupply is pushing many photovoltaic manufacturers to the brink, a new major entrant to the market could present a whole new set of challenges to incumbent manufacturers.

Suntech may have a new neighbor and manufacturing rival in Foxconn by mid-2012. Image: Suntech.

Recent reports from Bloomberg New Energy Finance (BNEF) may have many in the photovoltaic industry sitting up to take notice. Bloomberg has reported that electronics contract manufacturer Foxconn will begin photovoltaic module production with vast scales and reduced production costs.

Foxconn is currently the world’s biggest contract maker of electronics, including the Apple iPhone. Bloomberg reports that Foxconn has begun work on a photovoltaic module plant in China’s Jiangsu province, near Suntech’s headquarters.

BNEF analyst Jenny Chase said that Foxconn has experience in working in electronics production where margins are between two to five percent. This stands in contrast to past photovoltaic module manufacture margins as high as 30 percent.

"Foxconn’s entry into the solar industry has been rumored for a long time," Chase said. "The company’s formal entry at a time when ingot, wafer and cell makers are not making their cash costs must be bad news for the incumbent companies."

While details as to the Foxconn photovoltaic-manufacturing facility remain scarce, Bloomberg reports Foxconn will begin trail production in May.